When the times comes for you to remortgage or buy for the first time, there are certain things you can do to speed up the process.

If you can get yourself as mortgage ready as possible (possibly around 6 months prior to you needing a mortgage) then when the time finally comes, you will be in a much stronger position and your mortgage could go through much quicker.

So what can I do to get myself mortgage ready?

When applying for a mortgage or when remortgaging, your lender will perform an affordability test on you, to see if your finances are in order and ultimately decide if you are trustworthy enough to lend money to.

The tests will include a look at your income vs your expenditure, so it’s important that you are able to show that you are capable of keeping your finances in order.

Loans

If you have any outstanding loans, try and pay these off before you apply for your mortgage, and avoid taking out any more loans in the meantime.

Keep on top of payments

Pay all your bills on time. This can be anything from a phone bill, to general household utility bills.This will prove you are reliable and financially independent.

Electoral role

A simple but effective thing to do is to register on the electoral role. Also, make sure any bills you have are registered to your current address, so everything is easy to trace.

Employment

It is advisable to remain in the same employment for at least six months. This will give evidence that you have a regular, stable income coming in every month, and there is less chance of your employment being terminated on the spot, like it would if you were still on a probation period. You will be asked to provide pay slips over the last 3-6 months, so it’s important you can provide these.

Regular saving

If regular savings can be traced on your bank statements, this can be good for a number of reasons. Not only can it show where the money for your deposit has come from, but it can also prove to your lender that if you are able to save £500 a month, for instance, then this is money that can then go towards paying off a mortgage.

Consider your credit rating

Using a credit card responsibly can help improve your credit score, showing that you are able to look after your own finances and pay off any outstanding debts within a certain timeframe. Just make sure you register the card to the address you are actually living at, and you could even hook it up to your direct debit card, so you don’t have to worry about forgetting to pay it off every month.

The main thing is to prove that your spending patterns are in line with how you see yourself when you have a mortgage. If there are any cutbacks you can make, then now is the time to make them. Perhaps if you have a gym membership that you don’t use regularly, or you have a subscription to Sky that you probably don’t need, then it would be a good idea to cancel them for now, just to save you that extra bit of money. Afterall, every penny counts!

According to the latest research carried out by Mortgage Advice Bureau, over 50% of homeowners aged 18 to 40 do not currently have critical illness cover (CIC). But MAB advisers have seen the value of CIC first hand, in the case of Emma and Tom’s story.

Emma (32) and Tom (35) live in Greasby, on the Wirral, with their two sons Alfie (3) and Arlo (10 months). As a growing family, in December 2015 they were looking forward to the birth of their second child when tragedy struck and Tom was diagnosed with cancer. With Emma about to go on maternity leave and Tom unable to work, the couple faced the devastating consequences of dealing with Tom’s potentially terminal illness, as well as an uncertain financial future which left them in danger of losing their home.

In October 2015, Tom decided to go to the doctor about an ongoing issue he’d had with his leg. His GP immediately referred him to hospital for further investigation. Just before Christmas, the couple’s worst fears confirmed when Tom was diagnosed with a malignant tumour in his thigh. “The moment Tom got his diagnosis, the world seemed to stop,” Emma recalls. “Because of the Christmas holidays, we had to wait two weeks or so before Tom could be admitted to hospital for further investigation, so our lives were on hold. Christmas was surreal; we tried to make it as normal as we could for Alfie, and to keep as calm as possible, as I was 6 months’ pregnant at the time”.

With Emma about to go on maternity leave from her job, and Tom being self-employed therefore unable to earn if he didn’t go to work, in desperation the couple claimed on Tom’s Critical Illness Cover policy. Emma reflects, “We were scared; for ourselves, for Alfie and for the new baby. We knew that we couldn’t afford to stay in our home if Tom wasn’t earning, yet there was no way that he was able to work. If we hadn’t had the cover that we’d taken out a few years before, I honestly don’t know what we would have done.”

Emma continues, “Tom’s illness completely changed our perspective on life. As a couple, we never once thought ‘he won’t make it’. We just focused on taking each step at a time, and trying to keep everything as normal as we could, as much for Alfie and the new baby’s sake as anything else. Our family and friends were so amazing, but realistically, there wasn’t much they could do other than be there for us when we needed emotional support. Ultimately, it made us realise that you hear of these sorts of things happening, but when you do, you always assume it ‘will only happen to someone else’. In our case, we became the ‘someone else’.”

Their CIC meant that Tom could take the time off work he needed for the extensive surgery to remove the tumour. The money that Tom received enabled him to fully focus on his rehabilitation and recovery, as well as meaning that Emma didn’t need to go back to work following the birth of their second child, Arlo, in April 2016.

Fortunately for Tom, due to his swift diagnosis and treatment, he has been able to make a full recovery and in the last month he’s been given the all clear and has recently returned to work. Not only this, but the lump sum they received meant they were able to achieve some of their dreams as Emma explains,“the cover also provided a lump sum which has meant we can afford to move to a bigger house, which we really need with two little boys running around! It’s also meant that we’re now able to afford to get married, which after everything we’ve been through this year, will mean such a lot to us. Our wedding in November will be a celebration of our relationship and our family, and the fact that we’ve been able to beat Tom’s cancer, together.”

To make sure you don’t ever find yourself in the position where you can’t afford to pay your mortgage, get in touch with us today to speak with a protection adviser. We can either review your current policy to make sure it is still working in the right way for you, or we can arrange for a new policy to start.

Like the odds of Leicester City winning the Premier League title, mortgage rates in the UK continue to fall as the threat of an interest rate rise depletes.

The fall in mortgage rates comes after the Monetary Policy Committee (MPC) voted unanimously to keep the Bank of England Bank Rate at 0.5% for the 84th month in a row in March.

Two and three-year fixed rates were among the biggest movers, with the average three-year rate falling 0.09% and the average two-year falling 0.02%.

Why are prices falling?

Experts in the market, including the shadow MPC, are now predicting a rise in rates to occur around 2018, with some suggesting as late as 2020, and this is giving lenders the confidence that consumers will be able to make their payments on their mortgages more easily for longer.

This comes as good news for both potential buyers and current home-owners that are looking to remortgage their properties as they can look to lock into new deals with lower mortgage rates to pay lower monthly repayments before the rates do rise.

Low mortgage rates look set to stay for some time, and there is an appetite among lenders for business, leaving consumers in a good position to reap the benefits of the increased competition.

Do I have more choice now?

Our own research shows that, when compared to the same time last year, a borrower that took out a two-year fixed rate in February made an average saving of £53 per month in repayments, and with more mortgage products being on offer, consumers are continuing to benefit.

There was also a 3% rise in the number of mortgage products available to consumers in February, which is obviously great news for potential borrowers as advisers now have a greater choice of products to choose from to match to their needs.

Whilst the average two and three-year deals are at record lows, buyers with larger deposits are still set to obtain the biggest rewards, with lower loan-to-value mortgages attracting the better deals from lenders.

With all of the low interest rates around, now could be the time to remortgage or buy your first home. However, with tougher affordability criteria and varying rules in the mortgage world, seeking advice from a professional mortgage adviser is imperative in ensuring that you get the deal that is right for your circumstances.

With the changes in the buy-to-let arena looming over the sector like an angry schoolteacher, it comes as no surprise that there has been something of a sudden surge in landlord activity.

The number of mortgage approvals for buy-to-let properties were up to the substantial amount of 23,300 in November and, although this was down by 6% when compared to October, it indicates a 35% increase from the same time last year.

Why is there a sudden increase?

It’s likely that landlords and investors are doing their utmost to sort any new properties before the new 3% additional surcharge to Stamp Duty Land Tax (SDLT) comes into effect in April.

This comes after the news that there will also be a change to the tax breaks that are available to landlords that will take effect in a staggered manner beginning in April 2017.

Is there a reason for the changes to the sector?

The changes in SDLT could stop buy-to-let growth in its tracks and may well see the disappearance of the boom that has been present over the last decade.

The move made by the Chancellor has made it very clear that he is on the side of ‘Generation Rent’, and by shutting off future investment in the Private Rental Sector (PRS), he’s certainly shifted the view of the market. With fewer properties in the PRS, housing availability will increase and make it easier for more first-time buyers to step onto the property ladder.

What’s next for buy-to-let and landlords?

It’s likely that this increased activity will continue right up until the changes come into effect in April. There is a chance that landlords will decide to pass their extra costs onto tenants so, naturally, there is a chance that rents may go up. However, many experts are saying that landlords will factor the costs into their realistic outlooks on returns.

It’s been the subject of debate between economists and industry experts since March 2009 when it dropped to its record low of 0.5 per cent.

But, Bank of England governor, Mark Carney, has finally announced that the Bank Rate will rise as early as the start of 2016.

Carney recently announced that rates will begin to increase to around the 2.25 per cent mark, albeit at a slow and gradual rate, whilst still remaining significantly lower than the previous historical average interest rate of 4.5 per cent.

Should I panic about what’s to come?

Absolutely not.

Whilst it’s never wise to try and predict the future, fixed rate mortgages will continue to remain at record lows with data showing that almost 90 per cent of those buying and remortgaging are choosing to do so on fixed rates.

But, despite the mortgage war continuing between lenders, rates are unlikely to fall any further than they already are.

So why does the Bank Rate need to increase if everything is working?

It all boils down to inflation. Despite it currently sitting at 0 per cent, the economy is improving and unemployment continues to sit at an extremely low level.

If the economy continues to grow, it may begin to “overheat”. This is where demand outpaces productivity, which leads to suppliers hiking prices to reduce the demand. However, this may also lead to people paying more for things than they are actually worth.

Who will the rise affect the most?

Those currently on a variable tracker will potentially feel the change the most. For example, if you were paying off a £150,000 mortgage on a lender’s variable rate of 2 per cent.

If the Bank Rate reaches 2.5 per cent as expected, monthly payments may increase by around £160 per month*.

However, If you took your mortgage out after April 2014, when the Mortgage Market Review (MMR) was introduced, your mortgage adviser will have stress-tested your financial situation to ensure that you could cope with such a rise so there should be no need to worry if you haven’t had chance to assess your financial situation.

What should I do?If you have any queries or wish to discuss your mortgage situation, you need to speak to a professional and qualified mortgage adviser who will be able to guide you through the mortgage process.

For the first time in 55 years, the UK has entered deflation, with prices falling by 0.1 per cent in the year to April.

Not since March 1960, when Lonnie Donegan’s ‘My Old Man’s a Dustman’ was dominating the UK charts, has the UK seen a period of deflation. And much like Lonnie’s father, those who “don’t earn much” could stand to benefit from a brief spell of deflation.

To everyday consumers, having cheaper petrol and food than it was a year ago is obviously a good thing. Oil has fallen approximately 13 per cent and milk is 11 per cent cheaper than it was in April 2014.

But what about the farmers who make the milk or the companies that produce the oil?

Saying this, we look at whether deflation is a good or bad thing for the economy and how it could affect your everyday life.

Are we in deflation?

In the Bank of England’s quarterly inflation report last week, BoE governor, Mark Carney, said that: “A temporary period of falling prices should not be mistaken for a damaging spiral of deflation.”

Deflation is more of a long-term effect and, as the governor suggested, this is likely to be a temporary period, making it more of a time of negative inflation rather than deflation.

Is that a good thing?

Lower everyday prices of fuel and food is “unambiguously good” for everyone, according to the governor.

It was reported in the Telegraph back in January that we are likely to save £140 each as a result of falling fuel prices this year, and spending less on fuel and food means that we have more to spend on other things of choice – maybe new clothes or nights out, which, in turn, will mean boosted revenue for fashion chains or night clubs and restaurants.

It all sounds good. Why would negative inflation be bad?

Whilst buying fuel and food is instantaneous and needed, other more considered purchases such as buying a new car are optional. Being human, if we believe that something is going to be cheaper tomorrow than it is today, we will put off making the purchase in hoping to seize a better deal.

It is this stall in spending that could cause a majority of the economy to stall or slow.

Does this all mean that interest rates will rise?

No.

For as long as inflation remains below the Bank of England’s target of 2 per cent, it is highly unlikely that interest rates will rise. In fact, the longer the period of negative inflation lasts, there is an increasing chance that interest rates could be cut even further to increase spending to boost the level of inflation.

But, as mentioned earlier, Mark Carney believes that the negative inflation will not last and that the Consumer Prices Index (CPI) – which measures the changes in the prices of consumer goods and services – will pick up towards the end of the year, and it is for this reason that economists still expect that interest rates will rise in the summer of 2016.

Deflation or negative inflation is something that many of us will not have experienced in our lifetime, so it is imperative that you should seek advice from a professional mortgage adviser who will be able to help you find the right solution for your needs.

The mortgage market has become more challenging over the last year for borrowers with previous credit problems, according to the Mortgage Search Tracker from Mortgage Advice Bureau.

The percentage of customers citing past credit difficulties when searching for a purchase mortgage dropped from 3 per cent in the first quarter to less than 1 per cent in Q1 2015.

There was an even bigger shift among remortgage customers, where the percentage reporting past difficulties dropped from 6 per cent to less than 1 per cent over the same period.

This trend suggests that fewer customers with past difficulties have been motivated to seek a new loan since the Mortgage Market Review (MMR) took effect in Q2 2015 – or that those in this situation are less inclined to disclose an imperfect credit history when investigating a mortgage deal online.

However, as head of lending at Mortgage Advice Bureau, Brian Murphy, explains, more specialist lenders are beginning to enter the market.

He explains: “The MMR rules certainly make some types of borrower search harder for a deal to suit their needs and personal circumstances. But many borrowers can take comfort from the growing number of specialist lenders on the market which has boosted the product range.

“These new lenders operate safely within the affordability rules, and are often more willing than some mainstream brands to cater for people with an acceptable blemish on their credit record.”

First-time buyers who have used the Government’s Help to Buy mortgage guarantee scheme are spending £180 less per year on repaying their mortgage than if they were renting.

According to new data from Mortgage Advice Bureau, the average price of a property bought using the scheme was £153,447 in March.

Data from Moneyfacts.co.uk shows that, based on a 95 per cent loan on the average Help to Buy 2 property price, the typical monthly mortgage repayment for a borrower in their first year would be £753 (or £9,036 annually)*.

In comparison, the average rent across England and Wales now stands at £768 per month**. This means that Help to Buy 2 applicants could save £180 annually by paying for a Help to Buy 2 mortgage instead of renting – as well as paying off debt on their own home rather than for a rented property.

The average Help to Buy 2 property price is £78,681 or 34 per cent less expensive than the average purchase price in the wider market (£232,127).

Brian Murphy, Head of Lending at Mortgage Advice Bureau comments:

“The first-time buyer stamp duty announcement by the Labour Party was the latest salvo in the general election to court the vote of potential first-time buyers.

"Whatever policies we end up with after the election, our data shows that the mortgage guarantee scheme has worked: it has got first-time buyers onto the housing ladder and it has saved them money compared to renting.

“The scheme has also been a success in that it is being used by the people it was meant to help. When it launched, there was a concern that more affluent borrowers would take advantage of the scheme to purchase expensive homes.

"However, it’s clear that the scheme is being used by first-time buyers to purchase affordable properties well within their price range.

“As a result, average Help to Buy mortgage repayments are broadly in line with renting, making homeownership look far more affordable.

"While the scheme is expected to operate until 2020, lenders need to ensure there isn’t a gaping hole in the market when the scheme comes to an end.

Otherwise, borrowers with smaller deposits could find themselves locked out of home ownership.”

Following months of sluggish activity, the remortgage market experienced a long-awaited boost in January with applications up 24 per cent in the month and 17 per cent year-on-year, according to the National Mortgage Index from Mortgage Advice Bureau.

This beats an annual rise of 12 per cent in purchase applications as existing homeowners take advantage of the growing equity in their homes and record-low mortgage prices. The latter means switching can effectively deliver a pay rise of up to 4.8 per cent: twice the rate of annual wage growth.

Data from the Council of Mortgage Lenders (CML) shows remortgage activity was left behind in the market recovery last year; however, the outlook is looking far more positive for 2015.

With average house prices across the market rising 10 per cent annually, existing homeowners also benefitted from improved housing equity in January when they remortgaged. The National Mortgage Index shows the typical applicant put forward £133,719 of equity: 14 per cent more than in January 2014 (£117,345).

As a result, remortgage applicants are seeking lower loan-to-value (LTV) deals. The average remortgage LTV was 54.9 per cent in January, compared to 55.5 per cent in the previous month.

This puts them in a stronger position to take advantage of some of the better deals currently available on the market.

Using data from Moneyfacts.co.uk, borrowers can now save over £2,000 per year by moving to a more competitive deal, as the Index revealed that average mortgage rates continued to fall across the board in January for a fifth consecutive month.

January’s typical remortgage applicant had a salary of £47,881. This means the amount they would save is equivalent to a 2.8 per cent pay rise – or 3.8 per cent compared with a net salary of £34,912 after tax and National Insurance contributions.

“Remortgage activity fell behind last year as borrowers were placated by further delays to the base rate rise and lacked an opportunity or incentive to change their current deal. However, many people will find they could benefit from significant monthly savings by moving from their current product: particularly those who are on inflated SVRs.

“The current price war has been intensified by fierce lender competition and a number of new entrants to the market. Specialist lenders are now going head-to-head with traditional competitors and eye-catching product launches have become commonplace, giving rise to historically low rates.

“Many borrowers on their lender’s SVR can effectively give themselves a pay rise that beats wage growth simply by remortgaging. Remortgaging is often less hassle than people think, and the savings gained by moving from an outdated product are well worth the effort.

If you’re confused about the wealth of options available or the fees involved, seeking advice from a whole-of-market broker can help to identify the best deal for your circumstances.”

*Source: Bank of England quoted interest rates (Jan 2015). All other rates are from Moneyfacts.co.uk

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Swift Tailored Solutions and Mortgage Advice Bureau are trading names of Swift Tailored Solutions Ltd which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.